Two companies consolidate in Maine’s composite industry

Martin Grimnes, CEO of Harbor Technologies in Brunswick, says the company’s acquisition by Kenway Corp. is a good outcome for a company facing financial pressure. 2007 Press Herald File Photo/John Patriquin

Two companies that had been colleagues in Maine’s composite industry for decades will now combine into one company.

Kenway Corp., a major composite manufacturer based in Augusta, has acquired the assets of Harbor Technologies, a Brunswick-based composite manufacturer that had run into financial troubles.

Financial details of the acquisition were not disclosed.

Martin Grimnes, who founded Harbor Technologies in 2003 then turned over the reins of the company in 2012, returned as CEO in April. He said the two companies and their respective skill sets complement each other.

“We found a strategic partner interested in what we’re doing and we saw that as the best fit for our employees, our mission in life and for Kenway’s opportunity to grow their position in the marketplace,” he said.

Kenway is a 70-year-old company that designs and makes composite products for industrial customers in the power, pulp and paper industries, for transportation infrastructure projects, and for government and military markets. It recently acquired a Navy contract to make the equivalent of bumper pads to protect submarines docked for repairs, and safety equipment for the Zumwalt destroyers under construction at Bath Iron Works. Harbor Technologies’ focus has been on transportation and waterfront infrastructure. The company pioneered a new kind of corrosive-resistant beam that can be used in bridges, piers, marinas and other structures.

“We’ve been looking for ways to handle a difficult financial situation and at the same time how best to grow,” said Grimnes. “In looking for a strategic partner, we’ve known the Kenway Corp. for 30 years and have had a very good relationship with them. We complement each other in terms of where we go to market.”

Kenway’s president, Ian Kopp, described the deal as a strategic acquisition for the company.

“For a long time we have admired the visionary nature of the Harbor Technologies products and how they solve long-standing marine infrastructure corrosion and degradation problems,” Kopp said in a statement. “The breadth of Kenway Corporation’s composites engineering and advanced manufacturing capabilities will bring tremendous value to the Harbor Technologies’ customer base through our current product offering and our commitment to ongoing innovation.”

Harbor Technologies will become a division within Kenway, which Grimnes will continue to lead. It will vacate its leased manufacturing space in Brunswick and move operations to Kenway’s Augusta location, which is expanding with the addition of 10,000 square feet of manufacturing space. Harbor Technologies’ sales and marketing staff will remain in Brunswick, at the TechPlace incubator on the former naval air base.

Harbor Technologies has had as many as 40 employees within the last few years, but that number had shrunk to about 20 when Kenway acquired its assets, Grimnes said. All employees were offered positions at Kenway. Post-merger, Kenway’s employee count stands at just shy of 100 people, Kopp said Monday.

A DIFFICULT DECISION

Selling Harbor Technologies was a matter of necessity, according to Grimnes, who had been asked by his investors to step aside as CEO in 2012 and focus on business development. The board brought on Rob Fuller as CEO, who resigned this spring, prompting the board to invite Grimnes back into his old job.

“I very much realized and recognized that the company needed some help very quickly because it was in a tough situation,” said Grimnes, who was born in Norway but has lived in Maine for more than 30 years.

Despite proficiency at developing new products, the company was bleeding money because it hadn’t been able to control manufacturing costs and often overspent what had been budgeted in bids, he said.

Kenway, on the other hand, has proven itself adept at project management and controlling manufacturing costs, Grimnes said.

When Grimnes returned to the chief executive position, he realized Harbor Technologies’ options were limited. It could look for investors to provide a fresh infusion of capital, it could file for bankruptcy protection, or it could look for a “strategic partner” to acquire the company, he said. The

Opting for the latter, Grimnes didn’t hesitate to approach Kenway about the opportunity. Kenway’s CEO, Ken Priest, was an early investor in Harbor Technologies and served on its board for several years.

“Martin was and is a visionary in terms of how composites can fit a variety of applications and how to grow the market for composites, so he will continue to focus on what he does best,” Kopp said Monday. “Kenway’s engineering and project management crew is very good at integrating systems and then building them cost effectively, so they can be competitive in the marketplace. It’s a synergitic relationship.”

Because of Harbor Technologies’ financial situation, it wasn’t structured as a straightforward acquisition. Instead it was an asset sale in which Kenway acquired its hard assets, but not any outstanding liabilities. Harbor Technologies’ board officially dissolved the company last month. Grimnes called it a “controlled closing.”

The acquisition is the best outcome given the circumstances, Grimnes said. But, as the company’s founder, it’s also bittersweet.

“I am very pleased that all our employees are taken care of. … I am very pleased that the mission is not being lost at all; it’s being strengthened. We will now have greater resources to do what we always wanted to do in terms of developing products and markets,” he said. “I’m obviously delighted by those things, but is this what I wanted to see when I started the company? It’s probably not what I envisioned, no.”

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